The County Councils Network (CCN) has welcomed the government’s latest proposals on the fair funding review but warned it has concerns that the proposed formula for adult social care could fail to recognise demand for services in shire counties.

CCN also said that ‘compromise’ on all sides of the sector was needed, while it is ‘essential’ that the spending review provided additional resources for all councils.

Responding to the latest consultation, England’s largest councils said that overall, they believe that the review is heading in a positive direction, built on the twin principles of evidence and fairness. They praised the government’s proposals for arriving at a simpler, more transparent formula, and the use of a notional council tax rate adjustment.

Despite its downgrading from a main cost driver, CCN said it strongly supported the inclusion a new measure of travel times for rurality and density in the area cost adjustment (ACA), despite its downgrading from a main cost driver. This is alongside a new remoteness indicator.

CCN said it had asked the government to consider whether deprivation should be included in the foundation formula, but its inclusion – and weighting – must be evidence based.

The network has called on ministers to work with counties and ‘look again’ at the proposed adult social care formula. With almost half of county budgets dedicated to adult social care they are particularly vulnerable to adverse changes in the formula. Counties are home to the largest and growing elderly populations, and CCN research last year also showed that costs in caring for working-age adults with learning disabilities are set to rise by over £900m by 2025 – almost half of the total cost for the whole of England.

CCN’s response suggested that the cost-drivers in this service-specific formula would potentially maintain existing patterns of funding. CCN outlines that the proposed formula’s use of the ‘utilisation’ assumption as a proxy for need could fail to meet today’s real demands for services, including ‘unmet need’ for services and true cost of service delivery, particularly in working age adults.

Separately, CCN’s response outlines county leaders’ willingness to include home to school transport in the foundation formula – rather than a stand-alone service-specific formula – alongside concessionary fares. Research last year by CCN showed the cost of home to school transport was ten times higher in their member councils compared to cities.

The response said that while demand for home to school transport was concentrated in shire counties, the network’s support for the foundation formula meant it was willing to compromise. Nonetheless, they said its inclusion strengthened the case for concessionary fares and bus support to be distributed on a per capita basis and a higher weighting for rurality in the ACA.

CCN said its willingness to support the inclusion of school transport in the foundation formula was another sign that county leaders are willing to compromise to ensure that this ‘golden opportunity’ to reform council finance was taken. To see the review through to its conclusion, the network remains committed to working with other council groupings within the sector, especially in making the case for an increase in the ‘quantum’ of services available to all councils.

Cllr Paul Carter, chairman of the County Councils Network, said:

“We are entering the final stages of a review that could provide a golden opportunity to reset the dial and create a funding system that can truly stand the test of time; eradicating the unfair nature of the present methodology. I am confident that the direction of travel is inherently based on the principle of evidence and fairness.

“However, if we are to see this review through – and if we are to grasp this opportunity – compromise and pragmatism on all sides of the local government sector, will be necessary. We hope other parts of the sector will do likewise.

“To this end, counties are willing to comprise and explore whether there could be a role for an evidence-based deprivation weighting in the foundation formula. We have also conceded that home to school transport can be included in main formula, alongside concessionary fares and local bus support.

“At the same time, the uncertainty over the final adult social care formula is causing many in the shire counties concern.

“Initial proposals could fail to recognise the demand in counties from their significantly greater proportion of elderly and fail, alongside the enormous variability in demand for adult learning disabilities support. With adult social care the biggest cost-driver across local government, it is imperative that ministers arrive at a formula that reflects the evidence and we are asking them to look again at this.

“We look forward to working with ministers and the wider local government in taking forward the proposals, and crucially, securing the essential increase in the quantum of resources available to all councils in the Spending Review.”

Notes to editor

CCN is the national voice for England’s county councils. It represents all 27 county councils and 9 county unitary authorities. Collectively, they represent 26 million people, or 47% of the country’s population. It is a special interest group of the Local Government Association. For more information, visit countycouncilsnetwork.org.uk.

The utlisation approach is the main methodology used in developing the leading option for the adult social care formula, outlined in the consultation document. This was developed by LG Futures and the Personal Social Sciences Research Unit. The approach examines the support already being used and assumes this pattern is an adequate proxy for the need to use services. The utilisation approach assumes that supply is something that is within the control of local authorities but that both the means and needs tests are outside of their control; the formula will reflect the different patterns of current use and make no allowance for supply issues.